Blog

Update: Where does the DOL Association Health Plan proposal stand?

A proposed regulation from the Department of Labor (DOL) has been in dispute since early this year. Despite several strong adversaries coming to light during the March comment period, it seems the DOL will finalize its Association Health Plan (AHP) rule this summer.

Background:

The regulation would broaden access to AHPs by allowing employers to form an association on the basis of geography or industry, instead of only industry, trade, or professional association. It would also allow sole proprietors to join AHPs. According to a recent Avalere Health analysis, the proposed rule would have the following impacts:

Higher premiums for individual and small group– Premiums are projected to rise in the current individual (7% – 4%) and small group (0.1% to 1.9%) markets, relative to current law. This would be largely due to healthier employees shifting to AHPs

Increased number of uninsured– An estimated 130k to 140k individuals will become uninsured, mostly due to increasing premiums in the individual market as healthier individuals move to AHPs.

Additional 2.4M to 4.3M enrolled in AHPs– This represents members switching from the individual market (7M to 1.2M) and small group market (1.7M to 3.2M) into the expanded AHPs.

Lower premiums for AHPs– Premiums in the new AHPs are projected to be between $1,900 to $4,100 lower than the yearly premiums in the small group market and $8,700 to $10,800 lower than the yearly premiums in the individual market by 2022.

Back-and-forth

During the comment period, which came to an end in March, several groups wrote letters vehemently opposing the ruling citing negative effects on low-wage workers, potential for fraud, and negative impacts on people with pre-existing conditions as a few of the reasons to revise or rescind the proposal.

What’s next?

It’s yet-to-be-seen whether the DOL will adjust the ruling in consideration of the many concerns that arose. However, it does seem that one way or another, the AHP regulation will be finalized by this summer.

The views and opinions expressed by the authors on this blog website and those providing comments are theirs alone, and do not reflect the opinions of Softheon. Please direct any questions or comments to marketing@softheon.com.